The Effect on the Statement of Financial Position of a Business

question 35

Multiple Choice

The effect on the statement of financial position of a business buying supplies for cash is to:

• A) increase asset supplies; increase asset bank.
• B) decrease asset supplies; decrease asset bank.
• C) decrease asset supplies; increase asset bank.
• D) increase asset supplies; decrease asset bank.

---

Definitions:

Market Value

The current quoted price at which an asset or company can be bought or sold on the open market.

November 47.50 Call

A call option contract for the right to buy a specific financial instrument at a price of 47.50, expiring in November.

Call

A Call option is a financial contract that gives the option buyer the right, but not the obligation, to buy a stock, bond, commodity, or other asset at a specific price within a specific period.

European Put

A type of option contract that gives the holder the right, but not the obligation, to sell an underlying asset at a specified price on or before a specific date.